Guidance on financial needs from The Family Justice Council

The Family Justice Council (FJC) has published its second edition of “Guidance on Financial Needs on Divorce”, described by President James Munby as, “…an invaluable tool for the judiciary in relation to the making of orders to meet financial needs following divorce and the dissolution of civil partnerships.“

The guidance is intended to clarify the meaning of “financial needs” on divorce, particularly in reference to the most commonly encountered cases before the court, in which the available assets do not exceed the parties’ needs. It is in many of these types of cases that the court will depart from the presumption of equal sharing, as the needs of the parties’ justify the departure in order to enable the parties to transition towards a point of financial independence. Both The Law Commission and the FJC acknowledge the fact that in a significant number of cases independence is not possible, usually because of age but sometimes for other reasons arising from choices made during the marriage.

The FJC’s Guidance sets out that marriage typically creates a relationship of interdependence, commonly so when the parties have children. This longer term dependence can be created by decisions for one party to discharge family financial obligations at the expenses of the development of employment potential. The FJC guide the courts that it is generally right and fair that relationship generated needs should be met by the other party if the family resources permit.

Although the principle of “needs” has no single definition in family law, it refers to how the law considers the notion of spousal support, encompassing both income and capital, now and in the future. In practice, the main component of financial need will be housing following separation, together with the need for regular income. The court recognises that all aspects of “needs” are interdependent and should be considered in the round, rather than focusing on each individual aspect in isolation. This means that a wider contextual view of debts, benefits, pensions, mortgage capacity and income generation are all factors.

This broad, umbrella term of “need” is then measured by the available finances. the court’s attempts to stretch finite resources and income, ever so when these are modest, means that any children of the family’s needs predominate. Where it is possible to do so, the court will measure the parties’ need against the standard of living enjoyed throughout the marriage.

When dealing with financial matters in a marriage breakdown, there are many complex factors which need to be carefully considered. If you are in the process of dissolving your marriage or about to embark on the process, it is vital that you obtain clear and accurate legal advice early on. Our specialist solicitors have the experience and knowledge to assist you. Serving Bedford and central London, our lawyers can help you with your family law and divorce matters. Contact us on 01234 889777 or 0207 177 9777 to discuss your matter with one of our specialist solicitors.